Correlation Between Wyndham Hotels and PENINSULA ENERG
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and PENINSULA ENERG at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Wyndham Hotels and PENINSULA ENERG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wyndham Hotels Resorts and PENINSULA ENERG, you can compare the effects of market volatilities on Wyndham Hotels and PENINSULA ENERG and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Wyndham Hotels with a short position of PENINSULA ENERG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and PENINSULA ENERG.
Diversification Opportunities for Wyndham Hotels and PENINSULA ENERG
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wyndham and PENINSULA is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and PENINSULA ENERG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENINSULA ENERG and Wyndham Hotels is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Wyndham Hotels Resorts are associated (or correlated) with PENINSULA ENERG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENINSULA ENERG has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and PENINSULA ENERG go up and down completely randomly.
Pair Corralation between Wyndham Hotels and PENINSULA ENERG
Assuming the 90 days horizon Wyndham Hotels Resorts is expected to generate 0.4 times more return on investment than PENINSULA ENERG. However, Wyndham Hotels Resorts is 2.47 times less risky than PENINSULA ENERG. It trades about 0.12 of its potential returns per unit of risk. PENINSULA ENERG is currently generating about 0.01 per unit of risk. If you would invest 9,164 in Wyndham Hotels Resorts on September 25, 2024 and sell it today you would earn a total of 386.00 from holding Wyndham Hotels Resorts or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. PENINSULA ENERG
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| PENINSULA ENERG |
Wyndham Hotels and PENINSULA ENERG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and PENINSULA ENERG
The main advantage of trading using opposite Wyndham Hotels and PENINSULA ENERG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, PENINSULA ENERG can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PENINSULA ENERG will offset losses from the drop in PENINSULA ENERG's long position.| Wyndham Hotels vs. Marriott International | Wyndham Hotels vs. Hilton Worldwide Holdings | Wyndham Hotels vs. H World Group | Wyndham Hotels vs. Hyatt Hotels |
| PENINSULA ENERG vs. Apple Inc | PENINSULA ENERG vs. Apple Inc | PENINSULA ENERG vs. Microsoft | PENINSULA ENERG vs. Microsoft |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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